When salaries are paid more frequently, the velocity of money speeds up because individuals hold more cash.

Name: When salaries are paid more frequently, the velocity of money speeds up because individuals hold more cash.
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Question

Quizplus · Accepted Answer

When salaries are paid more frequently, individuals do not necessarily hold more cash. They may choose to spend or save the additional income, which could increase or decrease the velocity of money depending on how they use it.

When Salaries Are Paid More Frequently, the Velocity of Money